Sometimes it’s how markets don’t react to news that’s more important. Central bank minutes dominate the economic agenda today. The Bank of England’s showed another unanimous decision to hold interest rates and QE with the band still taking a neutral to hawkish tone. The FTSE has dropped back on this news as one would expect, but GBP has not rallied very much. Later today, FOMC minutes are due but may not have much of an impact as they have since been superceeded by comments from FOMC members. Last night in a speech, Fed Chair Bernanke pretty much crushed the potential for a December start to tapering. He agreed with the dovish comments made by his likely successor Janet Yellen at her confirmation hearing last week about the Fed needing to “promote a more robust recovery” and “maintaining accommodative policies for as long as needed”. Dovish comments from Minneapolis Fed President Kocherlakota this morning, who rotates into a voting spot for 2014, provide more confirmation of this. CPI falling to 1.0% indicates that the Fed is under no pressure from inflation to tighten any time soon. US stocks have failed, however, to respond to this dovish news with the Dow still under 16,000 and the S&P still under 1,800. Similarly, USD has dropped only moderately as part of an ongoing correction. Meanwhile action at the margins remains troublesome as Bitcoin continues to collapse, falling from over $600 toward $460 overnight and losing nearly half its price in a little over 24 hours. Ouch On the surface, the drop in gold comes as a bit of a surprise with the Fed in easing mode and USD backsliding. Gold’s relentless downtrend appears to be due to demand for haven assets in decline at the moment with political and financial meltdown risks continuing to ease. Demand for precious metals as an inflation hedge also remains in decline with inflation falling. Finally, as noted by the World Gold Council last week, physical demand for gold in jewellery and other applications continues to fall dramatically. This action suggests that markets have already priced in expectations of a no December taper Fed and a more relatively hawkish BoE. The failure to respond to what had previously been a positive catalyst for stocks suggests that stocks have become exhausted and may be getting due for a correction in the near term even if their long-term trends remain intact. Corporate News Deere $2.11 vs street $1.90 Lowe’s $0.47 vs street $0.48 Economic News Significant economic announcements released yesterday afternoon and overnight include: Bank of England minutes 9-0 vote, no thresholds breached, may not move immediately of 7% unemployment reached US retail sales 0.4% vs street 0.1% US consumer prices 1.0% as expected vs previous 1.2% NZ PPI input 2.2% vs previous 0.6% NZ PPI output 2.4% vs previous 1.0% Japan trade balance (¥1.090B) vs street (¥854B) Economic reports due later today include: 10:00 am EST US existing home sales street 5.15M 10:30 am EST US crude oil inventories street 1.0 mmbbls 10:30 am EST US gasoline inventories street (0.3 mmbbls) 2:00 pm EST US FOMC minutes

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